Shane Richmond is Head of Technology (Editorial) for Telegraph Media Group. He first joined the Telegraph in 1998 and has been Online News Editor and Communities Editor. He writes about all kinds of technology but especially Apple, iOS, ebooks and ereaders, and digital media.

Streaming music services may be killing off illegal filesharing

Illegal music downloading levels have dropped since late 2007 as more people turn to streaming music services, according to a new survey. The survey results, which show that teens in particular are sharing less music, are encouraging for those of us who think the music industry can compete with piracy if they offer a compelling product.

However, the survey, which was carried out in January this year by music business information agency Music Ally, also found that teenagers are more likely to share music via Bluetooth or by burning CDs than filesharing on the internet. So music filesharing isn’t disappearing, it’s just changing – in this case by going back to its home-taping roots.

Nonetheless, the survey shows that more teens are streaming their music via YouTube, MySpace, We7 and similar services. Spotify, the Swedish start-up, hadn’t officially launched when the survey was carried out but it has quickly become the darling of the industry.

That hasn’t stopped others following their lead. Virgin has announced plans for a streaming music service and now Microsoft are considering jumping on the bandwagon. The Telegraph reports today that the company may launch a free, ad-supported streaming service with a Spotify-style premium offering on top.

The challenge now is to find a way to make money out of these services. The answer is unlikely to be any one thing but instead a mixture of ad-supported services, subscription services and music offered free as a promotional tool for live shows and merchandise.

The Music Ally survey suggests that the music industry is finally on the right track when it comes to offering services that are more appealing than filesharing.